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Sanrith Descartes

Sanrith Descartes

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Creslin said:
The really bad shit ya but all the little bad shit still to come like earning revisions and weak housing market. And we are still tightening and the market has priced in at what the fed has said or a bit less so it depends on if you think a 3% is a fed rate can stop inflation. Personally I don’t and think we have the risk of rate shocks like we had in June every month as CPI continues to run really hot.

I still go back to the analogy of 2000 since I think that is such a similar bubble and back then the s&p took forever to chop its way to the bottom though we did have 9/11 in there. Most recessions see bottoms in the -30 to 40 percent range and I just can’t see it not being the case this time. And that’s my optimistic view.

My pessimistic view is this will be way deeper as we pumped so high and wouldn’t so much say the fed is out of bullets rather they have turned the gun on the economy.
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I don't think we are in a bubble. At least not for equities. Not overall. Were there bubbles like SPACs? Yeah. But in general? No. Were some metrics like PE stretched? Yes, but bubblefied? No. My belief is that easy money made companies sloppy in terms of management. They got fat. Even the bigs. Look at GOOGL. PE of 19 on EPS of $110 with little debt. META has a 12 PE on $13 EPS. Revenue growth is still moving. Those aren't bubble numbers. They are go long numbers.

Do we have zombies? Yes. But we always do. This tightening by the FED will not only eventually slow inflation but also hopefully kill the zombie companies as funding becomes too expensive and better options appear. I think what we are going through is healthy in the long term even if it sucks in the short term.
 
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Edaw

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Sanrith Descartes said:
I don't think we are in a bubble. At least not for equities. Not overall. Were there bubbles like SPACs? Yeah. But in general? No. Were some metrics like PE stretched? Yes, but bubblefied? No. My belief is that easy money made companies sloppy in terms of management. They got fat. Even the bigs. Look at GOOGL. PE of 19 on EPS of $110 with little debt. META has a 12 PE on $13 EPS. Revenue growth is still moving. Those aren't bubble numbers. They are go long numbers.

Do we have zombies? Yes. But we always do. This tightening by the FED will not only eventually slow inflation but also hopefully kill the zombie companies as funding becomes too expensive and better options appear. I think what we are going through is healthy in the long term even if it sucks in the short term.
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circle-of-life-lion-king.gif
 
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Falstaff

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Sanrith Descartes said:
I don't call bottoms or tops. But I will say that like everything, some stocks are over sold and the S&P 500 PE is down to 18.5 which is 2007 recession area. We can and might keep falling, but I can't see it dropping another 15 or 20%. I think we are.in the neighborhood. Until the next black Swan event hits us next week.
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I know you are trying to be helpful and provide your insightful perspective (I mean this seriously, not sarcastically) but this post made me smile, so thank you, and I don't mean this to goof on you.

1. I don't know where we are in this cycle.
2. Stocks are oversold
3. Or are they?
4. We might keep going down
5. Or will we?
6. Let's just agree we'll probably stay stagnant
7. Until we don't

Happy Saturday :)
 
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Sanrith Descartes

Sanrith Descartes

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Falstaff said:
I know you are trying to be helpful and provide your insightful perspective (I mean this seriously, not sarcastically) but this post made me smile, so thank you, and I don't mean this to goof on you.

1. I don't know where we are in this cycle.
2. Stocks are oversold
3. Or are they?
4. We might keep going down
5. Or will we?
6. Let's just agree we'll probably stay stagnant
7. Until we don't

Happy Saturday :)
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What I love about the market is we really don't know shit about it. Any of us. We come up with terms (cycle, over sold, over bought, RSI, etc) but do they really mean the same thing to everyone?

And then on the other side of the fence we have those who believe in random walk theory. So who is right? Who the fuck knows.

At the end of the day I have developed an ever evolving market strategy that works for me. Much like my life, it ain't perfect but it works for me.

What made me chuckle about your post is you pretty much hit it. No one can know answers to any of those points you make definitively. All I do here is post my thoughts, my trades and the reason behind them. Its really up to each reader to decide if I am right, wrong or somewhere in between.

Back to mowing the lawn.
 
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Tmac

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Sanrith Descartes said:
I watched the beginning. I don't have time at the moment to watch it all. I am familiar with Burry and his history.
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It's not about his history though, it's a breakdown of what Burry says is coming. And he says we're only in the first inning and expects another 56% drop.
 
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Zog

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I think it's important to reiterate that the stock market isn't the economy and earnings are the great correction to reality but there's nothing stopping certain companies getting bought up and rallying on literally nothing.

Short squeezes are definitely a thing, while anyone with their finger on the pulse of macro indicators knows shit is bad, that doesn't necessarily mean we just keep dropping forever. Its not too far fetched to think the s&p companies won't get ahead of a pull back in consumer spending, we've already seen some cut payroll to hedge against a slow down and if they are able to meet or god forbid beat expectations, even if they are lower from last quarter, you got a situation on your hands.
 
Tmac

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Based on made up technicals, we're just below where we should be had things progressed normally during/post COVID. However, they did not and the government printed enough money to pay for five forever wars:

1655670989577.png


How much further below "where we should be" do we go in a recession? Michael Burry says another 56%, so what's that, 200-220 QQQ?
 
Arden

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Zog said:
I think it's important to reiterate that the stock market isn't the economy and earnings are the great correction to reality but there's nothing stopping certain companies getting bought up and rallying on literally nothing.

Short squeezes are definitely a thing, while anyone with their finger on the pulse of macro indicators knows shit is bad, that doesn't necessarily mean we just keep dropping forever. Its not too far fetched to think the s&p companies won't get ahead of a pull back in consumer spending, we've already seen some cut payroll to hedge against a slow down and if they are able to meet or god forbid beat expectations, even if they are lower from last quarter, you got a situation on your hands.
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The Burry vid gives a pretty good explanation as to why a negative macroeconomic environment (like the one we are in) creates an autocatalytic downturn cycle that affects the stock market as a whole. And why, regardless of an individual company's efforts to mitigate the downturn, such a cycle can't be entirely avoided by anyone. He's not saying we are going to drop forever, he's saying we will drop roughly another 56%- if previous historical markers hold. Im no expert, but it made logical sense to me.
 
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